Microsoft allows "downgrade" to Windows XP until at least 2014.
Microsoft announced that, for the lifetime of Windows 7, it will provide "downgrades" to Windows XP for licensed users of Windows Vista and Windows 7. This applies to the OEM versions (that is, pre-installed by computer makers) of Windows 7 Ultimate and Windows 7 Professional only. (This "downgrade" policy had been scheduled to expire with the release of Windows 7 Service Pack 1 — now in beta test.)
The announcement was part of Microsoft’s announcement that "Public Beta Now Available for Windows 7 and Windows Server 2008 R2 Service Pack 1".
If you work within a corporate environment, you will understand this policy:
Windows Vista and Windows 7 require faster computers with more memory than Windows XP. So, what seems at first to be a simple software update actually requires a hardware replacement as well. For businesses of any size, this is a "forklift upgrade" — which businesses in this weak economy can’t afford when they’re barely able to make payroll.
Small businesses may rely upon mission-critical applications that aren’t supported by Windows Vista or Windows 7. Some apps are no longer supported by their vendors and will never be updated. It’s a bad idea to run your business with obsolete software, but in this poor economy small businesses may not be able to invest in system overhauls.
Some larger businesses with major investments in XP have concluded that an update to Windows 7 (and certainly Windows Vista) may not offer a worthwhile cost / benefit ratio. (Even Intel concluded that "upgrading" its 80,000 desktops to Windows Vista was a waste of resources.)
Some users require features that no longer exist in Windows Vista or Windows 7. See List of features removed in Windows Vista and List of features removed in Windows 7. Some of these, such as "Unlike Outlook Express, Windows Mail does not allow users to switch Identities or manage multiple identities within one running instance of the program", may be real annoyances. (I notice that "The NWLink IPX/SPX/NetBIOS Compatible Transport Protocol is no longer supported" — this prevents connection via Novell’s IPX/SPX network protocol to legacy Novell NetWare servers. RIP.)
My guess is that many home users will go with Windows 7, especially since new retail PCs will no longer be available with Windows XP after this October. However, many business users will remain with Windows XP . . . which will make XP the longest-lived Windows yet. (It was released in 2001.) I applaud Microsoft for recognizing the reality of today’s business users who don’t have a penny to spare.